Israeli officials are arguing that a ship carrying 50 tonnes of weapons seized in the Red Sea was part of a smuggling operation co-ordinated by the Palestinian Authority (PA), the Lebanese militant group Hezbollah and Iran.

Seven days after the ship was seized, the United States has said there is compelling evidence of Palestinian involvement, despite Palestinian denials.

Iran and the Palestinians have denied any connection with the arms

Correspondents say the Israeli Government has been going to great lengths to convince Washington that the Palestinian leader Yasser Arafat is linked to Tehran and the pro-Iranian Hezbollah, and hence to what it sees as international terrorism.

The 4,000 tonne freighter Karine A was intercepted some 500 Kilometres (300 miles) off the Israeli coast on Thursday 3 January by armed Israeli commandos.

They were acting on Israeli intelligence claiming the PA was planning to significantly boost its military capability.

The haul

Israeli officials claim "Operation Noah's Ark" netted a cache of military arms, worth between $10m and $15m, provided by Iran and destined for the PA.

The haul, they said, included Katyusha rockets, which, with a range of 20 kilometres (12 miles), can hit Israeli cities and destroy tanks.

There was also 1,500 kilograms of high explosives, anti-tank missiles, mortars, sniper rifles and mines packed into crates, sealed in watertight plastic, Israeli officials said.

Israeli Prime Minister Ariel Sharon described the vessel "The Ship of Terror" and pointed the finger firmly at Mr Arafat saying the shipments "would have changed the strategic balance".

Ariel Sharon described the vessel as the 'Ship of terror'

The PA, Israel said was violating interim peace agreements.

Under declarations signed with Israel, the PA is allowed a limited number of small arms, such as rifles to police territory under its control. Heavy weapons, long-range rockets and explosives are forbidden.

The PA denied any link to the vessel, as did Iran, which has long been at odds with the PA over the Oslo Peace Process.

The US said it wanted to "know the facts" before "speculating and drawing grand conclusions".

Who, for example, owned the ship, and where was the proof that Mr Arafat had ordered the weapons?
Where did they come from? Who were the intended recipients?

Captain's testimony

In interviews from his prison cell to Israeli and Western media, the ship's captain, Omar Akkawi, said he worked as a naval traffic adviser for the Palestinian transport ministry.

Mr Akawi claimed he was a member of Mr Arafat's Fatah group

He also said he had been a member of Mr Arafat's Fatah faction since 1976.

He said he picked up the arms from an island off Iran's coast in the Gulf and they were destined for Gaza and the PA.

The plan, he said, was to transfer the crates to smaller boats near the Egyptian port of Alexandria.

They would then be transported to a near the Gaza coast, where they would be picked by Palestinian navy officers disguised as fisherman.

Hezbollah involvement?

The captain asserted that the operation was organised and supervised by a senior PA official based in Greece.

Captain Akkawi said the man, Adel Mughrabi, who was in charge of weapons acquisition for the PA, had arranged the purchase of the Karine A for $400,000 (£280,000).

Deepening the plot, Israel implicated a reported senior Hezbollah security officer, Imad Mughniyeh, as playing a leading role in the whole affair.

He is on the FBI's wanted list for his alleged role in the kidnapping of Western hostages in Beirut during the 1980s and the hijacking of a TWA flight to Beirut.

But in a further twist, Israeli claims that the ship belonged to the PA were thrown into doubt earlier this week by documents naming the owner as an Iraqi based in Yemen.

Registration documents acquired by specialist shipping newspaper Lloyds List based in London show the former owner Diana K Shipping of Beirut had sold the freighter - then called Rim K - last August to Ali Mohamad Abas.

The paper said the vessel had been reflagged from Lebanon to Tonga.

The Palestinain Authority has now launched an investigation into allegations that the arms on the boat were ordered by its own officials.